BPC leads loss-making parastatals

Boitshepo Majube | Tuesday April 15, 2014 14:30

 

In a damning report, the Auditor General has stated that parastatals providing essential services like BPC, Botswana Meat Commission (BMC), Water Utilities Corporation (WUC), Air Botswana and Botswana Postal Services lead in loss-making. In general, most of the parastatals are failing to pay the statutory 25 percent dividend due to government. Even some that made profit like Botswana Telecommunications Corporation have not declared dividends to government.

The Auditor General stated that BPC incurred a loss of P1.25 billion, after a tariff subsidy of P871.00 million. The loss was a result of the fact that expenses of P4.48 billion exceeded income of P3.23 billion. The Auditor General said the BPC board believed that the corporation would receive another bail-out from the government.

Air Botswana’s loss is worsening as it stands at P74.45 million up from P47.12 million. “The going-concern status of the airline is dependent on continued government support,” the Auditor General stated.

WUC recorded a loss of P191 million, compared to P541.60 in the previous year. However, the Auditor General notes that the reduction in the loss is mainly due to significant increases in revenue from P579.67 million to P790.78, while expenditure remained relatively stable at P1.16 billion against P1.13 billion in the previous year.

“During the year, the corporation had received from government a tariff support subsidy of P200 million,” the Auditor General reported.

The Auditor General has noted that significant control weaknesses at BMC identified in the previous year’s audit remain unresolved.

These included non-reconciliation of inter-company balances and control accounts, non-review of useful lives and residual values of property, plant and equipment, under-deducted VAT input and absence of formal contract between BMC Lobatse and Gluckman Family Trading Ltd.

The Auditor General reported that the Botswana Postal Services recorded a loss of P76.29 million, compared to P3.57 million in the previous year.

Notable increases were recorded in administration expenses, other operating expenses, restructuring costs and finance costs which totalled P189.32 million compared to P110.61 million last year.

However it is not doom and gloom as some parastatals made profits. The Botswana Development Corporation (BDC) recorded a profit of P25.97 million while the 

National Development Bank, Botswana Telecommunications and Botswana Agricultural Marketing Board performed well.